Wintermute Loses $160 Million in Defi Hack
September 21, 2022 By Fakun Gram
(Image Credit Google)
A prominent crypto market maker robbed
According to Gaevoy, the hacker stole around 90 tokens from Wintermute’s wallet. Additionally, Etherscan shows that the cybercriminal grabbed various assets from the company—Tether, USDcoin, Wrapped ETH, and Dai stablecoin. Interestingly, as per numerous reports, the hacker’s wallet is dubbed “Wintermute Exploiter.”
On another note, market makers like Wintermute play a significant role in crypto trading in the world of Web3. They provide liquidity to crypto exchanges and DeFi platforms. Furthermore, higher liquidity rates allow for more seamless transactions between traders. And thus are a critical indicator of a market’s overall health. To sum it up, market makers play a vital role in the operation of exchanges and are responsible for running things smoothly. However, chaos ensues if a hacker robs a market maker.
But concerning the latest hacking case of Wintermute, CEO Gaevoy assured users that their money is safe. “If you have a [market maker] agreement with Wintermute, your funds are safe. There will be a disruption in our services today and potentially for the next few days and will get back to normal after,” he said in his tweet. In addition, the company claims it is solvent and still holds twice the equity as the amount that it lost.
More details
Gaevoy and Wintermute did not reveal any technical details about the hack. Therefore, it is unclear how the hacker accessed the company’s wallet. However, various security analysts believe the hack probably occurred through a hot wallet compromise due to a recently discovered bug in Profanity (a popular cryptographic tool used to generate wallets).
Besides, this isn’t the first hacking case caused by the exploitation of this bug. Also, this isn’t the first time a cybercriminal stole coins from Wintermute. For instance, the company was responsible for the disappearance of around $20 million in Optimism (OP) in June. In this case, a hacker stole the tokens when they got trapped in a wallet. The market maker took complete responsibility for the episode, even offering to buy an equivalent amount of the money lost. However, the cybercriminal later returned most of the stolen tokens.
Conclusion
After the most recent hack, it is still unclear whether Wintermute contacted law enforcement or opened a dialogue with the cybercriminal. But, Gaevoy did disclose that the company is willing to treat the episode as a “white hat” hack. Hence, it will allow the hacker to keep some stolen funds if they return the majority.
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